Scientific Games signed an amendment to extend its current contract as the primary vendor to supply instant tickets and related services including warehousing and distribution to the Tennessee Education Lottery Corporation for an additional four years. The amendment commences in April 2011 and lengthens the current contract to 2015. Revenue to Scientific Games is estimated at approximately $9 million per year.

In 2008, the Tennessee Lottery produced $796 million in instant ticket sales and returned $286 million to education. Since inception in 2004, the Tennessee Lottery has raised more than $1.3 billion to fund specific education programs.

Meanwhile, Scientific Games Corp. (Nasdaq: SGMS) reported full-year and fourth quarter 2008 results.

For the full-year 2008, revenues increased 7% to $1,118.8 million, compared to $1,046.7 million in 2007. The increase was driven by service revenue growth in all of the company's business groups, especially driven by the Printed Products and Lottery Systems Groups, which together represent approximately 79% of total revenue. The company benefited primarily from domestic "same-store" sales growth, continued growth in the Italian instant ticket business and the start-up of operations in China.

For the full-year 2008, EBITDA decreased to $298.9 million from $307.5 million in 2007, primarily due to employee termination costs and contract loss accruals of $23.1 million, a Global Draw earn-out accrual of $4.4 million and increased stock compensation costs of $8.8 million. Excluding these items, adjusted EBITDA increased 8% to $360.5 million, compared to $335.3 million in 2007.

In 2008, EBITDA and adjusted EBITDA were also negatively impacted by $8.3 million of incremental airfreight costs to China which will not occur in 2009.

Net income for the full-year 2008 was $8.5 million or $0.09 per diluted share, compared to $65.4 million or $0.68 per diluted share in 2007. The decline in full-year 2008 net income is primarily related to employee termination costs, contract loss accruals, the Global Draw earn-out accrual, an increase in stock compensation costs and $76.2 million of asset impairments. Non-GAAP adjusted net income in 2008 was $113.5 million or $1.20 per non-GAAP diluted share, compared to non-GAAP adjusted net income of $98.7 million or $1.04 per non-GAAP diluted share for the full year 2007.

"The growth exhibited across our business groups in spite of the global economic meltdown in 2008 is a testament to the resilience of our business model," commented Lorne Weil, Chairman of Scientific Games. "We achieved this growth because we have proven to be a valuable vendor and partner to our government and private customers, helping them grow their revenues both in the U.S. and abroad. Going forward we expect the Company's relationships with existing customers to strengthen and the range of services we supply to expand as they look to Scientific Games for new revenue opportunities. Furthermore, given the outlook for the global economy, we anticipate our pipeline of opportunities with new customers to increase as they recognize that Scientific Games' portfolio of lottery and gaming solutions add significant value to new growth initiatives."

Revenues in the fourth quarter of 2008 were $263.9 million, down 2% from $268.0 million in the fourth quarter of 2007. The decline in revenues was primarily due to the negative impact of foreign exchange rates; excluding that impact, revenues would have actually increased 3%. The negative impact of foreign exchange rates was partially offset by growth in the Chinese instant ticket business and the continued expansion of Global Draw and Games Media.

EBITDA for the fourth quarter of 2008 declined to $40.3 million from $73.7 million in the fourth quarter of 2007, primarily due to employee termination costs and contract loss accruals of $18.8 million, a Global Draw earn-out accrual of $0.9 million and a $2.9 million increase in stock compensation costs. Adjusted EBITDA declined to $69.8 million in the fourth quarter of 2008 from $83.1 million in the fourth quarter of 2007 primarily as a result of the re-pricing of the Florida cooperative services contract, start-up costs associated with the Company's new printing operations in China and the negative impact of foreign exchange rates. These declines were partially offset by growth in the Chinese instant ticket business and revenue growth in Global Draw and Games Media. Excluding the negative impact of foreign exchange rates, adjusted EBITDA would have been $72.1 million.

During the fourth quarter of 2008, EBITDA and adjusted EBITDA were negatively impacted by $2.1 million of incremental airfreight costs to China which will not occur in 2009.

Net loss for the quarter was $65.8 million or $0.71 per share, down from net income of $16.4 million or $0.17 per diluted share in the fourth quarter of 2007 primarily due to the charges mentioned previously and $76.2 million of asset impairment charges. Non-GAAP adjusted net income was $16.5 million or $0.18 per non-GAAP diluted share, compared to non-GAAP adjusted net income of $22.1 million or $0.23 per non-GAAP diluted share in fourth quarter 2007.